The free site, which went live in January, generates revenue from health care providers who become "tenants" on the site. When a consumer sets up an appointment with a clinic or doctor on Carol.com, the provider pays the site a fee.(emphasis mine)

Never mind about the hoopla of price transparency, consumer choice and all that other impressive verbiage. This is nothing but an internet version of physician referral services that have been around for over a generation. (I remember my mother's skeptical take about a service that would even "make the appointment for you.") The kicker (or should I say "kickback") is that providers pay by the appointment.

Think about advertising for a moment. The correct way to compare pricing is not the absolute cost of one ad versus another, but how many potential patients it will attract. Say a Yellow Pages ad yields 50 patients a year. Suppose there's a neighborhood newspaper ad that costs one tenth as much yet produces 25 patients. It's not rocket science (or even advanced calculus) to figure out which is the better deal.

The best ad is the one that costs you the least amount of money per patient it generates. Once you start talking about an arrangement where you pay directly for the patients who respond instead of for the ad itself, that is no longer advertising: it's a kickback scheme.

What's the difference between Carol.com and my friend Carol, who comes to me and says, "If I tell all my friends about you, will you pay me $10 for each one who comes to you as a new patient?" Nothing at all.

The utility of networks like Carol.com is completely dependent on the number and quality of the medical providers it can sucker into its scheme sign up as "tenants." Any provider with even a modicum of business savvy should run, not walk, as far away as they can from Carol.com (as currently structured) and all of her friends. Move along; there's nothing new here.

6 Comments:

While I share your skepticism, I think the very posting of high-cost procedure prices offers a price-point for patients who are burdened with increasingly more of their healthcare bill. Unfortunately, the intangibles that we seek in healthcare providers, (compasion, intellect, experience, support staff) can never be objectively "compared" online - (what one person sees as a great person might not even be close to what another is seeking). Nonetheless, with procedures or tests in which the people-part is absent, this model might just save the consumer a pretty penny.

Tests, even without the "human element", can vary in quality from one site to another. I work in a tertiary referral center doing oncology... my patients often get outside CT and MRI scans, echocardiograms, bone marrow biopsies, and other procedures where the so-called "intangibles" should not matter. I can assure you, the quality of the scans my patients get vary MARKEDLY from place to place. So again, price should be secondary... after all, the patient doesn't save anything if the inadequate MRI has to be repeated.

Dude! Kickbacks are currently rampant in the finest great medical centers in the country. One only needs to look at how many have arrangements with medical device companies who give kickbacks for volume concessions (yet charge full price to patients) or how many use only the devices invented by their program directors?

And advertising? Should we ignore the transgressions of TV stations that fail to mention that stories about "breakthough" treatments at our finest medical centers were paid for, of course, by those medical centers?

To think that there is not a subterrainian undercurrent of backroom deals far more pernicious than this web-based "kickback" advertising scheme is naive. Patients deserve better, and at least this "scheme" is out there for all to vet, which, I might add, you have done admirably.

An overriding characteristic of our free market economy is "where there is a perceived need, someone will try to fill it." Either we decide as a society that medical care is a "right" for everyone or not. If so, let's adopt a single payor system, discuss money and rationing out in the open, and get on with it. If not, let's let the market take over and buyer beware. We can't have it both ways. It's driving everybody crazy.

As fond as I am of free market solutions to reform our health care system, creating lower prices, better patient care and innovative services, I don't believe in charging a toll between the patient and the provider.

I launched OutofPocket.com --a community website created by consumers for consumers that enables people to look-up prices and find the best value for routine health care services. The site relies on consumers to post/share actual prices they paid for services, along with recommendations on the provider.